Monthly Archives: February 2011

A quick story about Capital Raising and Romance

I met just before Christmas with a chap recently who wanted to raise capital to help in franchising his business, which I will decline to name for reasons that become obvious soon.  I, however, thought it was a bit early to try to raise capital as his business wasn’t particularly systemised, exciting or potentially lucrative. In fact I wasn’t convinced that his business model actually worked. Therefore, I suggested I would introduce him to a friend who was an Angel Investor, who has had a lot of success in franchising and whose insights on business model innovation I valued. The chap I met disagreed with me about him not being ready for franchising yet and felt that lack of cash was the only thing holding him back.

So despite my vague doubts that he wouldn’t actually listen to any advice that wasn’t inline with his own ideas, I introduced him by email to my friend. A couple of days later, I was cc’d on an email back to my friend that had not much more than a Capital Raising Information Memorandum (I.M.) attached.

Having that sinking feeling that this wasn’t right, I did a quick check and here’s what I discovered.

  1. No other correspondence had occurred, so the first thing my friend knew after the introduction was he was sent an I.M. by email.
  2. The I.M. was unasked for, which was slightly irritating to my friend.
  3. I also got this in the email back from my friend “the franchise offer on his site links you through to a ‘broker’ and then I couldn’t find his listing on their site, amongst the plethora of chicken cooking, lawn mowing and other ‘franchise-offers’ of (not much) note.”

I was really disappointed by this as an outcome, because I think Capital Raising is hard work, but impossible if you don’t treat it like romance. You need to:

  1. Make sure you have something good to offer, not just mutton dressed as lamb.
  2. Meet people who are potentially looking for exactly what you have got, not just put the hard word on everyone you meet.
  3. Put in some groundwork developing the relationship, don’t just cut to the chase and ask “how about it?”

So, where is the love here?

Do you have a brilliant idea?

Picture this:

  1. I am approached by “John” who has been recommended to talk to me about his new venture – but it turns out he wants me to sign an NDA before he can discuss it. I refuse to sign unless he can give me an outline of what he is proposing, so we agree to meet at a cafe for coffee and a chat.
  2. When he arrives, he explains his  venture is still at the idea stage – but it turns out he hasn’t done much research.
  3. He has a manilla folder with him – which turns out to be empty, I’m not kidding!
  4. He is convinced he is on a winner and doesn’t want advice, just investors – but it turns out I have to pay for the coffee as in his excitement he has forgotten his wallet.

This has happened to me more than once (more fool me). The problem is that everyone has some great product ideas, as well as some completely rubbish one. Only they can’t differentiate, they think all their ideas are good.

Since I try to get smarter as I get older, I now demand a high level overview to be sent to me in the mail, before I will commit to investing any time at all. However I also recently noticed a new service on the landscape, that specifically deals with peoples ideas for products.

Its called Quirky. What Quirky does is get you to to submit your idea to their community. The crowd then decides whether your idea has legs, and if so they they then get their paid team to evaluate the product, doing research, design, branding and engineering. If everything looks a go, they then manufacture and market your product.

If your idea doesn’t make it, it only costs you $10 to submit plus you get a whole lot of feedback.

If your idea does make it, you get paid, the crowd gets paid, and of course Quirky gets paid.

Its as close as I have seen to getting real life product validation, without you needing to invest. It could save a lot of time in coffee shop’s listening to people assert their idea is brilliant.

Turning waste into PR

I went to hear from Tom Griffith of Emma and Tom’s fruit juices at The Hive the other day. Apparently in their early days, their minimum production runs were always more than they could sell, which was a problem as their stock was highly perishable. Their clever solution was to use this excess as sponsorship for events.

This got me thinking about my social venture, the Churchill Club.  Although vastly different from a fruit juice company  i thought –   our production run, an event,   normally exceeds our ability to sell as well, i.e. there are normally some spare seats in the room.

Some quick facts:

  • We run around 22 events a year in Melbourne on Technology, Entrepreneurship and Innovation.
  • We can currently sit 60 people at an event.
  • We charge for tickets but always have a couple of people attending free as they are the speakers, the speakers guest, or special guests of the club.
  • Each person costs us to attend as we provide canape and have an open bar.
  • We don’t break even until we reach 20 people and the modal event has around 35-40 people.

So after listening to Tom, it occurred that perhaps rather than looking at us selling an event, perhaps we should be thinking about it as having 60 seats available that are highly perishable, and normally 20 or so seats expire, un-consumed every fortnight.

With this in mind I thought about two potential options.

  1. Giving away a couple of seats as sponsorship to some groups I think are worthy, and
  2. Selling some excess tickets at the last minute discount that can sit just above our costs.

Now because I have recognised that I am no where near as clever as I used to think I was, I circulated these thoughts to my “brains trust” first. And below are paraphrased versions of their answers.

Scott Kilmartin – founder, haul : In the theatre business they call giving away free tickets, ‘papering the room’, which is great to add atmosphere and get some potential new members through the door. If you keep the ‘papering of the room’ relatively quiet and do it with a view to building alliances and tie in to some sponsorships then I think it’s a good idea.

Peter Lewis – GM Business Development, Hydrix : It would be worthwhile to be quite strategic with the sponsorships and deal with some some unexpected groups that would certainly touch the demographic. eg the RMIT entrepreneurship course or recruitment companies like Mitchell Lake.

Jon Manning – Director, Sans Prix : I would always say experiment and compare results. Discounting last minute tickets though is contrary to current pricing wisdom as patrons should be rewarded for booking early, not waiting to the last minute. Have a think about how airlines do ticket pricing, because these people are seriously good at it.

Bob Peterson – Director, F3 : Experimenting with your business model is intelligent. However I don’t like selling-off the perishable/fungible excess stock (discount model) even when/if you have a small number of pre registrations. It sets lower expectations to the attendees, whereas gifting tickets can raise credentials. Last minute discounting simply devalues your brand.

And yes, I had to look up fungible too.

I think the pattern was fairly clear though.

  • Strategically gifting a few tickets on the quiet to worthwhile organisations = Good.
  • Last minute discounting = Bad.
  • Business model experimentation = Excellent.

Event Report from the Churchill Club’s – Serious Play

Notes taken by me at the Churchill Club programme on the 17th February 2011.

With
Bill Lang
– Founder, Scores on the Board
Gilda Howard
– CEO, Gowrie Victoria
Trudi Pavlovsky
– Founder, The Dream Initiative

What is Play?

Play is activity that is normally; enjoyable, not motivated by a desired completion, not motivated by external demands. It is the doing that matters, and with play, children are the experts.

There are lots of different classifications of playing, including:

  • Practice Play – Provides critical opportunities for children to develop both individual gross and fine muscle strength and overall integration of muscles, nerves, and brain functions.
  • Constructive Play – Constructive play is when the environment is manipulated to create things. It is a basis that is required downstream to be good at manipulating words, ideas and concepts.
  • Dramatic Play – Where you learn to abstract, to try out new roles and possible situations, and to experiment with language and emotions with fantasy play.
  • Social Play – By interacting with others in play settings, children learn social rules such as, give and take, reciprocity, cooperation, and sharing. Through a range of interactions with children at different social stages, children also learn to use moral reasoning to develop a mature sense of values.
  • Games with Rules – Developmentally, most children progress from an egocentric view of the world to an understanding of the importance of social contracts and rules. The “games with rules” concept teaches children a critically important concept – the game of life has rules (laws) that we all must follow to function productively.

There are also a number of different ways of playing, including:

  1. Unoccupied play: the child is relatively stationary and appears to be performing random movements with no apparent purpose. A relatively infrequent style of play.
  2. Solitary play: the child is are completely engrossed in playing and does not seem to notice other children. Most often seen in children between 2 and 3 years-old.
  3. Onlooker play: child takes an interest in other children’s play but does not join in. May ask questions or just talk to other children, but the main activity is simply to watch.
  4. Parallel play: the child mimics other children’s play but doesn’t actively engage with them. For example they may use the same toy.
  5. Associative play: now more interested in each other than the toys they are using. This is the first category that involves strong social interaction between the children while they play.
  6. Cooperative play: some organisation enters children’s play, for example the playing has some goal and children often adopt roles and act as a group.

As we get older, we tend to spend a lot more time with Cooperative and Associative Play, basically dropping the others.

There was a suggestion that flirting and sex play are the main ways adults play. But nobody in the audience felt comfortable exploring that line of discussion.

Games are a subset of play, but often conversations around play end up about discussions on games only. You need to remember you can be playful without playing games. Games is play with rules and outcomes. Rules are necessary to prevent conflict and aid understanding.

Quotes

Plato was also attributed as saying “You can learn more about a person in an hour of play than in a year of conversation.”

Nagle Jackson said “The truly great advances of this generation will be made by those who can make outrageous connections, and only a mind which knows how to play can do that.”

Brian Sutton-Smith said “The opposite of play is not work, it is depression.”

Why is Play important?

Why do we have play? Play provides an environment where we can:

  • Fail without consequences and therefore learn without pressure.
  • Release thoughts that are normally constrained.
  • See situations differently.
  • Re frame ideas.
  • Re-energize.
  • Engage in different discussions than we normally wouldn’t.
  • See or create new opportunities.

People at play are more present, engaged and passionate.

Being valued and involved with workmates, motivates people. Its important for everyone to feel they have a voice.

Happy people are more productive, and playing makes people happy.

As children we learnt through play, and those experiences stick. Adult training is mostly boring and generally consists of either short courses or “teach yourself”. Play is therefore a powerful learning tool (amongst other things) untapped by most adults.

Play engages the whole of you – your mind, emotions and body not just the brains.

Innovative Companies don’t use bureaucratic models.

So What is the Science of Play?

The part of the brain known as the Amygdala, has strong involvement in connecting emotions with memories and responses.

There appears to be an actual physical relationship (chemical) between thinking you can do something and actually being able to do it. So it appears to be true that “if you think you can, you can, if you think you can’, you can’t.”

Studies have also shown that activities such as lying actually makes you weaker and being proud makes you stronger. But what’s more fascinating is that we pick up the vibes of others and and our brain chemistry try’s to match theirs. So if you associate with people who think you are weak, you will become weaker, if you associate with “can do” people, you will become more capable.

Which is why adults disengage, because they don’t believe they can do things.

Play is a method or re-engaging adults and allowing them to change their “programmed” responses. Re-engaged, motivated adults means increased results from their work.

Recent studies into Neuro-placticity appear to indicate we can change the way our brains work even when we are adults, especially by using tools such as play. We can continue to learn and old dogs can learn new tricks.

What are the issues with Play?

Babies put things in their mouth to learn. The desire to pay is built into us. Children want to play to learn, in fact some activities appear to be required. Studies show that reading difficulties will ensure for those that don’t learn how to crawl. However between the ages of 12-15, play tends to vanish as people become adults. Play is then thought of as being childish and not a desirable activity.

Adults only tend to think of play as a learning tool that can be used to make them better at their work.

In organisations the is a fear of play as it doesn’t fit into the seriousness of work. There is also difficulty in running successful play programmes as it will not meet all learning styles, nor fit in with all cultural and generational perceptions. Therefore you will never have 100% engagement in play activities.

Fun ideas aren’t considered reliable, because they are fun.

What things can I do?

We can build play back into the fabric of what we do, to create happy engaged organisations, not just see it as a learning tool.

Some examples of playful behaviour in the workplace include:

  • Pirate day’s, and inviting candidates to take $2,000 to not join the company at Zappos.
  • Graffiti Walls, Pool Tables & Employee Artwork hanging on walls at Google.
  • Slides between floors at places like Macromedia and Technical University of Munich
  • At Cha Cha Sam they occasionally get up and sing or make weird noises.
  • At Destra they would bang a large gong when they had something to celebrate or announce.
  • Nerf ball fights, dead ants and competitions are also common.

Competition can also be made playful. In the military play is a normal learning tool to reinforce lessons and there is almost always “good” conflict inherent in the game. But there must be rules in the game for conflict to be okay.

In large corporates though, they want to be sold on the $ rationale

Accept that real life environments are never ideal. You cannot get the whole group engage because there are too many personalities involved.

Recognise that the optimal group size for games is < 7 and effectively facilitating activities for over 12 people is almost impossible. Online games can be large eg over 20,000 players, but this is because you only interact with a small handful at a time.

– end of report –

Cloudy computing with a chance of showers

A great label for a technical product can work wonders for consumer takeup. See Blue Ray Vs HD-DVD, iPod v’s MP3 Player, Blackberry V’s Symbion O/S. Which leads me to Cloud Computing. I don’t generally like Cloud computing because internet access isn’t ubiquitous in Australia. Generally wireless access is good for around 40km from the CBD, then it becomes flaky or non existent in most places unless you have a land line connected.

Which leads me to a concept I do like, but there doesn’t seem to be a good name for it other than the description – Cloud Computing with automatic background sync and optimised local client. Basically your primary source of data sits on the internet, with a web based interface to access it, however it also automatically sync’s local copies of the data to what ever client your using, and has a local software for whatever environment you are using, that also automatically gets updated when a new version is released.

Too hard to understand? Picture this. I am writing an article using Open Office Write on the desktop in my home office. I get tired so I save it, shut down the computer and go to bed. Two weeks later I am in country Victoria without internet access, I pick up my iPad, open the article using Pages and add the new thought. Just like magic the article is there without me having to do anything. Some good examples of this concept, and free for the basic versions are:

IMAP Mail

Most Internet email setups default with what is called POP3 mail. This means you download your email to your local client, eg inmail, Outlook etc and delete it off the server. However there is almost always another version of email available with your ISP called IMAP. IMAP keeps your email on the server and syncs a local copy. I use Thunderbird on my desktop and netbook, and Apples email client on the iphone and ipad. All of them sync with the same IMAP mailboxes so I always have a local copy of all my incoming and outgoing emails no matter what device I happen to be using.

Dropbox

Dropbox is a file storage solution. It appears as a folder on my desktop, but anything I store in there, eg spreadsheets, images, drawings etc, also appears on my ipad and netbook where I also have dropbox setup. I have subfolders within my dropbox which I can share with friends and colleagues. This works really well for me as it makes it incredibly simple to work on and share share a document over 5MB with my colleague Grace in London, or some food recipes with a mate two blocks away. Drop box works on Mac’s Windows, iPads, Linux and is free for the first 2Gb of storage.

Calendar

I use Google Calendar for all my calendering which syncs with my Desktop, Netbook, iphone and iPad. Once its configured, it automagically keeps things up to date. My wife also syncs a copy of my main calendar to her iPhone so she can see what evenings I will be out, or what we have planned on upcoming weekends.

The advantage of these types of solutions are:

  • They are mostly completely free, or free for small usage levels.
  • I remove the major issue with most of my IT solutions, which is me. After they are setup, they simply work and I don’t have to do anything or think about it.
  • I don’t have to think about which device I will use, or which version I am accessing.
  • I don’t have to be connected to the internet, to be effective.
  • Accessing local data is much fast than accessing data on the internet.
  • The background sync can normally be encrytped or can be setup as encrypted, which means I don’t have to worry about being hacked when my data passes over the internet. Although there is no such thing as totally safe data on the internet.
  • Background sync means that there are lots of copies of my data – although bad entries can also propagate.

I am still looking for an encrypted password storage solution that works on Windows and the iPad, but I am sure one will appear soon as solutions that only sit on one decve are now considered to be “dumb” solutions.

Cloud Computing with automatic background sync and optimised local client isn’t a great name, but it is a great solution. I tend to think of it as Cloud Computing with local showers, but I don’t think this will catch on either.

Own Goals

Last week I was honoured to sit in a meeting of a team that was assured of success. I say this with disgust though as the group refused to clearly define what they they were trying to achieve, specifically so they couldn’t fail. Sadly its too easy to get away with this in a NFP environment.

And because I have the shits up, I thought I would write about the 3 most common areas of failure that I see amongst leaders.

1. Lack of goals

Don’t define desired outcomes, don’t define what success looks like, and especially don’t define what failure looks like. This means that you are absolutely assured of not failing. You can carry on about culture and process if you like, but culture and process without one eye on outcomes means you can end up with some really nasty results. After things go really bad, you tend to hear “I was only following orders”. Employees of AWB, Securency and OneTel all thought they were doing a fabulous job.

2. Create small goals

If you create really small goals, its really easy to be successful. Unfortunately you tend to get stuck in this cycle and tend to believe your own success so much, you don’t even notice the big opportunities that wave to you as they pass you by. Certainly Real Networks thought it was doing pretty well when it rejected Tony Fadell‘s idea for a content delivery system for MP3 player. Apple liked it and launched iTunes with its music player into a crowded market. And speaking of music, the record industry did really well for artists when protected their revenue streams by suing Napster. They now have a tiny share in the digital music market.

3. Change your goals to suit your outcomes

The number one area of failure I see in start-ups is that they change their goals to match their outcomes. If you don’t get sales, you were just trying to validate a market. If you don’t get profits, you were just exercising your production systems. Blogger was a side project of Pyra Labs inc. who were building an online project management and CRM tool. After it was bought by Google, Google let the founder Evan Williams, of Twitter fame, go.

If you set smart goals, you risk failure. You also learn and get better.

Going to go home and wash now.

Event Report from the Churchill Club’s eCommerce Success

From notes taken by me at the Churchill Club’s event “eCommerce Success” on the 10th February 2011.

With
Nathan Huppatz – Director, Directshop
Martin Hosking – Chairman, Red Bubble
Mark Freidin – COO, Catch of the Day
Chris Dwyer – Director, eMatters

Our Stories

Redbubble is global artists community that sells “creative consumables” it doesn’t compete with other online t-shirt shops.  It currently has 350,000 members, was born global and has averaged 100% growth per year over the last 5 years in the USA.

Catch of the Day is a highly successful Australian eCommerce site that sells one good deal a day.  It attributes its success to the quality of the deal (you always get viral marketing from a great deal) and the media profile of its spokesperson.  Its started off as an eBay store.

Directshop regularly deploys its own eCommerce sites as well as assisting clients deploy and integrate their own.   Some of their sites, such as the recently sold Tacklemania grew from $0 – $130K pm within 6 months.  They attribute their success to understanding the data and listening to customer feedback where ever it appears.

eMatters is an Australian payment gateway that has been around for around 12 years.  Its customers are web developers, not Joe Public, so its marketing spend on Google Adwords is minimal.  It was started with the concept of “lets sell shovels to Gold Miners” and has ridden the eCommerce wave.  Although in 1999 it was just two servers in a data centre with some anti-virus running, now their world is much more complex, especially with PCI compliance.

So why eCommerce?

Apart from the obvious attributes of being open 24 hours a day to global audience, eCommerce websites had a number of other attributes that were highlighted by the panel.

  • Low barriers to entry (cost and time) means new concepts can quickly be validated.
  • The fast rate of change on the internet means new opportunities are constantly appearing
  • Costs are much lower when you operate without a shop front and potentially with no stock.
  • Its easy to increase your range as you don’t need to carry stock.

But some things you need to be aware of include:

  • You need to be very clear about your strategic marketing, the who, what, when and why.
  • Its okay to evolve your solution if you know your “true north”.
  • You will lose the human touch so you need to find new ways to engage.
  • Feedback will be more visible, both good and bad and needs to be monitored across social media and other websites.

But an example of how effective it can be.  Directshop started Tacklemania after determining via eBay data there was an unsatisfied demand.  Within 6 months they were turning over $130K per month and then sold the business.

So what are some great eCommerce sites?

Apart from Red Bubble and Catch of the Day, the following websites rated a mention:
Amazon – was considered a great eCommerce offering because of its vast footprint and its heavy used of customer feedback.
Etsy – because of its user interface and allowing customers to shop the way they want to.
Groupon – because of its success in using aggregation of buying power as its business model.
Australia’s Dealsdirect – because of its dominance as an online clearance centre.
Ebay – because of its size, online auction model and its transparency for trends and margins

Note Foreign markets were considered to be 3-4 years ahead for eCommerce trends so they are the places to watch.

Some hybrid models are appearing such as MSY which is an eCommerce shop-front with delivery being pick up from a warehouse.

So which Platform should I use?

Currently there are a number of options available.

  • Build your own store from scratch.
  • Setup, configure and host free shop solutions such as Magento or O/S Commerce, or paysomeelse to do it for you/
  • Pay a small fee for a hosted shop solution such as Yahoo eCommerce.
  • Sell products through a speciality retailer such as RedBubble or Catch of the Day.
  • Sell products a third party with a huge audience such as as Amazon or eBay

There is no best solution.  It depends on what you want to achieve and who your customers are.

eBay was considered to be fantastic for validating a market.  Having a store on eBay was very cheap (between $16 – $300 per month).  It also has some fantastic analysis tools such as Pulse and Terapeak to help you understand where the opportunities are.  However your potential competitors will also be watching and if you get volume, they will notice.  You will need to either move away or stay and constantly innovate.

Building a successful eCommerce Strategy

The top points to come out of the discussion about building a successful eCommerce site were:

  • Be completely transparent – hidden charges will lead to you being savaged in social media.
  • High price can create perceived quality online as well as off-line.
  • Clarity about what you do means you don’t compete on just price.  Eg Competitors sell T-shirts, Red Bubble sells creative consumables at a much higher price.
  • Being highly focussed means your growth will be viral.  Understand exactly who your customers are and the experience they want, it may not be who/what you expect.
  • Integrity and customer experience are critical.
  • The barriers to entry for a start-up are very low, with costs approaching zero  if you are technically literate.  Growth will cost though as your volume increases and you  need to integrate your shop into other systems you may run such as accounting, CRM and fulfilment.
  • Getting your business model right means that you will benefit from word of mouth or viral marketing.  SEO and SEM aren’t overly useful if you don’t have a great value proposition that’s well targeted.

Interestingly, even though eCommerce is very cheap to deploy (eg $20K for a shop) its considered expensive compared to a bricks and mortar shop (eg $200K to fit out and stock).

Mobile eCommerce

Mobile Commerce or mCommerce is considered to be the next wave, but you shouldn’t dive into it just because of this.   The key advice was get your business model and web site right and working properly before thinking about other platforms.

Australia is only just starting to catch up with the rest of the world in terms of all eCommerce activity

Note the Apple App store is not secure – You don’t want to create Apps where users need to put in their  credit card numbers.  Leave that to a secure web site and then integrate the App.

Directshop’s experience is that 5-10% transactions in Australia are now phone based.  However there is strong resistance to  typing credit cards details into phones due to clumsiness and security concerns.  Setting up an account on the web, then logging into your account on a phone is a normal way to proceed.

Payment Gateways

High transaction charges in Australia has killed the idea of micropayments (eg transactions under $2).  Generally you need to have a prepaid accounts that you are accessing.  Australian Banks don’t want micropayments as they want to earn at least $1 plus per transaction.

Some banks charge fees on the gross amount of transactions, some on the net.  Note some banks will charge you their fee on fraudulent transactions, but not reverse it later when a charge back occurs.

NAB and St George were considered about the easiest and best Australian banks to do online business with.  Westpac was considered the most difficult to do online business with.

Selling services is more difficult and normally involves prepayments or deposits as banks wish to minimise their liability.    However you can minimise issues with mid or end of month charging (ie after the service)  rather than month ahead.

Paypal is always a good solution, albeit somewhat expensive and slower to get at your money.

Fraud

Fraud cannot be stopped and chargebacks can be a material cost to an online business.

The ways of fraud are quite varied, even received bank to bank transfers can get reversed later.  Quite often the shipping address and stolen credit card details are local, but goods are immediately transhipped to another country  – this is regularly occurs via the “earn $500 pw working from home” situation.

Verified by Visa simply doesn’t work properly as it kills too many transactions that are valid.

You can block some countries based on IP address (easy) and based on first four numbers of credit cards (difficult to achieve as the list is not publicly available).  Privacy laws make it harder to detect fraud.

Maxmind (USA) has a product that assists in minimising fraud through analysing factors on the fly such as location and credit card numbers, to generate a fraud likelihood score.

Always remember, if the deal is too good to be true it probably is – eg don’t ship 50 mobile phones to Nigeria.

Multicurrency

An early consideration in selling in the global market place, is “what currencies should I sell in? Obviously the answer is the currency of the target markets you wish to address.  However trading outside of AUD$, US$, Canadian, Euro, GBP and NZ$ will make life a lot more complex and some currencies should be avoided all together – eg Selling in African currencies asking for trouble.

Exchange rates will also be a problem.  The choices are:

  • Fixed Exchange Rates
  • Automatic (market linked) fluctuations
  • Regular Manual Adjustments

Each option will bring its own benefits and problems such as near parity between AUD$ and the US$, not being reflected in the price, or silly looking prices such as AUD$100.32 each.

Supply Chain Considerations

Auspost is amazing for Australia/NZ delivery but too expensive for overseas shipping. Their eParcel solution is great because parcels will be left at a local post office if delivery can’t be made.  Couriers don’t offer this service.

Aggregating goods on a pallet for shipping to another country, then using a local company for distribution once there is normally the cheapest solution.

Shipping from US to Australia is much much cheaper than shipping from Australia to the US.  Eg its cheaper to ship from California to Carlton than to ship from Carlton to Richmond. You need to take shipping costs into account when determining where manufacturing will occur.

Insurance for your supply chain should be reviewed.

Christmas is a popular time of year for buying online.  Unfortunately its a difficult time of year to get fast shipping and many western world manufacturers will be closing their doors for a period.

Freight costs can easily kill a business if you don’t closely monitor them.  Bricks and Mortar retail can carry the high costs (gouging) as they are used to it and consequently their prices are so much higher.

– end –